印度醫療衛生dissertation范例參考
10-23, 2014
印度衛生行業概覽
印度衛生行業的關鍵部門主要包括醫院，診斷，制藥，醫療旅游，醫療設備，臨床研究，生物技術和醫療資訊。醫療保險也直接或間接地影響了印度衛生部門的發展。
十年間，印度的私人衛生部門已經得到了顯著成長（1999巴魯）。印度的醫療保健給藥系統是由超過80％的私營部門和不足20％的公共部門共同統治的。在印度，獨立的私營部門僅有8％的醫療設施（世界銀行2004），但最近的估計表明，所有的醫院，擁有64％的病床，85％的醫生，80％的門診病人和57％的住院病人，93％集中在私營機構（世界銀行，2001）。
對優質醫療保健的需求也增加了更愿意使用私營醫療設施的患者。印度的經濟繁榮推動了城市化進程，創造一個不斷擴大的中產階級群體，更多的可支配收入花在醫療保健方面，更多的婦女進入勞動力市場，進一步提升了印度家庭的購買力。
Overview Of Indian Health Industry Economics Essay
The Key sectors being Hospitals, Diagnostics, Pharmaceuticals, Medical Tourism, Medical Equipment, Clinical Research, Biotechnology & Medical IT. Medical Insurance has directly and indirectly contributed to the growth.
Over the years the private health sector in India has grown remarkably (Baru 1999).Healthcare delivery system in India is dominated by private sector comprising of more than 80% and Public sector less than 20%. At independence the private sector in India had only eight percent of health care facilities (World Bank 2004) but recent estimates indicate that 93% of all hospitals, 64% of beds, 85% of doctors, 80% of outpatients and 57% of inpatients are in the private sector (World Bank 2001).
The demand for quality healthcare has increased with patients preferring to use private healthcare facilities. India’s thriving economy is driving urbanization and creating an expanding middle class, with more disposable income to spend on healthcare. More women are entering the workforce as well, further boosting the purchasing power of Indian households. Between 1991 and 2001, the percentage of women increased from 22% to 26% of the workforce, according to the Indian government census. [1-H] In the period 1993-94 to 2001-2002, aggregate household expenditure on health services has increased at an annual rate of 9.3 percent. - [6-H] Over 150 million Indians have annual incomes of more than US$ 1,000, and many who work in the business services sector earn as much as US$ 20,000 a year. If the economy continues to grow at the current rate and the literacy rate keeps rising, much of western and southern India will be middle class by 2020 says a CII study.
An important driving growth factor in the healthcare sector is India’s booming population, increasing at a 2% annual rate. By 2030, India is expected to surpass China as the world’s most populous nation. By 2050, the population is projected to reach 1.6 billion.[1-H]
Life expectancy, which averaged 63.3 years in 2000-04, is expected to increase to 66 years in 2010. The proportion of the population aged 65 years and over is also on the rise, and has increased from 4.7 per cent in 2000 to 5.3 per cent in 2005 and 5.8 per cent in 2010. Although the rate of ageing in India is slower than the developed world, the large population makes any increase significant in terms of absolute numbers, and therefore also in terms of market potential.-[10-H]
The Indian economy, estimated at roughly $1 trillion, and is growing in tandem with the population. Goldman Sachs predicts that the Indian economy will Expand by at least 5% annually for the next 45 years (see chart), and that it will be the only emerging economy to maintain such a robust pace of growth -[1-H]
A survey by NCAER, an independent economics research agency, suggests that per capita expenditures on healthcare rise with higher education levels. Households that have higher education levels tend to spend more per illness than households with lower education levels. Rising literacy in India is improving health awareness.-[10-H]
Change of disease pattern from chronic diseases to lifestyle diseases. Studies also indicate that lifestyle-related diseases such as high blood pressure, heart disease, cancer and diabetes, obesity, psychiatric disorders are fast becoming common, not only among the 300 million or more emerging Indian upper middle and the upper classes, but also among the rural class, thus India is not only undergoing major economic transformation, but also undergoing epidemiologic transition.
Increasing private sector participation in healthcare services is stimulating change in the Indian healthcare industry due the government FDI policy i.e. 100% FDI is permitted for all health-related services under the automatic route, Income tax exemption for 5 years to hospitals in rural areas, Tier II and Tier III cities, Lower tariffs and higher depreciation on medical equipment.
Introduction INSURANCE SECTOR
The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life insurance business, the Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance that provided strict state control over the insurance business, from 1946 onward after Indian independence the insurance sector was completely dominated by Indian players.-[5]
It was perceived that the private companies would not promote insurance in rural areas and the government would be in a better position to channel resources for saving and investment by taking over the business of life insurance. This led the government to nationalize all the private life insurance’s (154 Indian insurance companies, 16 non-Indian companies, and 75 provident societies) on January 1956 the wholly state owned Life Insurance Corporation of India was established and granted a monopoly. - [5]
The non-life (general) insurance was not nationalized until 1973 as this was urban-centric catering mainly to the needs of organized trade and industry, a government company known as General Insurance Corporation of India (GIC) was formed by the central government thereby 107 Indian and foreign insurers operating in the country were grouped into four operating companies namely 1) National insurance co. Ltd, 2) The New India Assurance co. Ltd, 3) Oriental Insurance company Ltd, 4) United India Insurance company Ltd, all the four subsidiaries of GIC compete with each other. But they failed to provide better service, products and also were not able to reach the vast majority of people in the rural areas, because of a highly bureaucratic, corrupt, inefficient administration and mismanagement of investable funds.-[5]
By 1991 the entire Indian economy was going for Liberalisation, Privatisation, and Globalisation (LPG). Slowly various sectors got privatized to promote healthy competition for the benefit of Indian customers, but only after almost eight years was the insurance sector in India privatized in 1999-[5] As the government wanted to proceed with caution it decided to set up a committee headed by Mr. R.N. Malhotra (the then-governor of the RBI) in April 1993 which recommended in its report released in January 1994 that the market should be opened to private-sector and ultimately foreign private- sector. - [5]
On December 7, 1999, the government passed the Insurance Regulatory and Development Authority (IRDA) Act, repealing the monopoly conferred to the LIC in 1956 and to the General Insurance Corporation in 1972.-[5]
In less than six years time (2000-06), 15 life insurance and 09 non-life insurance players entered the Indian market. The impact of privatizing the Indian insurance sector brought
Market Expansion
New Product Offerings
Improved Customer Services
New Channels of Distribution
Many of the major global insurance companies have entered the Indian life insurance market through joint ventures with Indian companies. These include AIG, New York Life, Allianz, Prudential, Standard Life, Sun Life Canada, ING, MetLife, Cardiff and Old Mutual. This has rejuvenated the erstwhile monopoly player LIC, which has responded to the competition in an admirable fashion by launching new products and improving service standards.-[5]
Health Insurance
IRDA defines health insurance as: the effecting of contracts which provide sickness benefits or medical, surgical or hospital expense benefits, whether in-patient or out-patient, on an indemnity, reimbursement, service, prepaid, hospital or other plans, including assured and long term care.-[18]
Health insurance in a narrow sense would be ‘an individual or group purchasing health care coverage in advance by paying a fee called premium.’ In its broader sense, it would be any arrangement that helps to defer, delay, reduce or altogether avoid payment for health care incurred by individuals and households.
Premiums for health insurance in India are determined only by two factors: the age of the insured and the amount of insurance chosen. Unlike life insurance, there is no differential rating between sexes in India. Under most health insurance policies, entry age for coverage ranges from 3 years to 55 years, although some insurers cover a new-born child provided that the parents are simultaneously covered. Coverage is extended to 85 years if it is continuous and the claims ratio is deemed acceptable by the insurance company (in effect negating any guaranteed renewability of policies for those over 85).-[18]
In the public sector, Of the various schemes offered, Mediclaim is the main product of the GIC. The Medical Insurance Scheme or Mediclaim was introduced in November 1986 and it covers individuals and groups with persons aged 5 – 80 yrs. Children (3 months – 5 yrs) are covered with their parents. This scheme provides for reimbursement of medical expenses (now offers cashless scheme) by an individual towards hospitalization and domiciliary hospitalization as per the sum insured.-[2]
On December 7, 1999, the government passed the Insurance Regulatory and Development Authority (IRDA) Act. The authority created by the Act is now called IRDA. It has 10 members. New licenses are given to private companies. IRDA has separated the life, non-life, and re-insurance businesses; a company has to have separate licenses for each line of business. Each license has its own capital requirements (around $24 million for life or non-life and $48 million for re-insurance). - [5]
Players in the industry
Health insurance accounts for approximately 13% of general insurance industry’s aggregate portfolio. Approximately 60% of the health insurance market share is with 4 public sector non-life insurers, while private sector insurers account for 40% of the market share. – [19]
There are three types of insurers that offer health related products:
General Insurance (P&C) companies:
Public Sector – 4 players:
The General Insurance Corporation (GIC) and its four subsidiary companies (National Insurance Corporation, New India Assurance Company, Oriental Insurance Company and United Insurance Company) and the LIC of India provide voluntary insurance schemes.
Private Sector - 8 players.
In private insurance, buyers are willing to pay premium to an insurance company that pools people with similar risks and insures them for health expenses. The key distinction is that the premiums are set at a level, which provides a profit to third party and provider institutions. Premiums are based on an assessment of the risk status of the consumer (or of the group of employees) and the level of benefits provided, rather than as a proportion of the consumer’s income.
Life Insurance Companies:
There are 18 private sector life insurers, plus public insurer LIC.
Life insurance offer some health benefits as riders to core life policies, but there is an
Increasing trend towards substantial health riders and stand alone health products.
Stand Alone Health Insurance companies:
Star Health and Allied insurance Co.Ltd commenced operations in May 2006.
and Apollo DKV Health insurance Co Ltd commenced operations in February 2008 are registered exclusively to underwrite health, personal accident and travel insurance segment has continued to grow and expand its business significantly. Bupa Max the third entrant in the industry as a standalone Insurance company is awaiting registration from the IRDA
Write about the Government policy to include PVT players in the FDI scheme
The insurance industry in India is well organized to make sure that its interests are represented. IRDA, as the insurance regulator, forms the nodal point for insurers to influence government policy. Insurers individually or through their associations, the Life Insurance and General Insurance Councils, approach the regulator for discussions on issues that impact the insurance industry. (18]
Major national Trade associations like Federation of Indian Chambers of Commerce and Industry (FICCI), Confederation of Indian Industry (CII) and Associated Chambers of Commerce (ASSOCHAM) have championed the cause of health insurance and have partnered with the insurance industry as well as the provider community to influence health policy reforms.-[1
Health Insurance ( Trends & Progress)
Health insurance has experienced dramatic growth over the past two decades. The number of persons covered has increased annually by over 25 per cent from 1991-92 to 2005-06. The premiums have increased annually by 35 per cent during the same period. While this growth is impressive, the base was exceedingly small and the industry still insures only a small portion of the Indian population.-[18]
During 2005-06 the non-life health insurance companies collected premiums of Rs 22.6 billion and covered an estimated 17 million persons. During the same period, life insurance companies covered around 66,000 lives under health riders and generated Rs 94 million as health insurance premium. This was a substantial change (at least in premium) since the premium collected by life companies from health riders increased from Rs 76 million in 2004-05 to Rs 94 million in 2005-06, an increase of nearly 30 per cent.-[18]
Although the number of persons covered has grown from 0.69 million in 1991-92 to 3.5 million in 1998-99 and around 17 million in 2005-06, it is still a very small percentage of the population, only 1.56 per cent in 2005-06. Despite the impressive growth of health insurance, it remains a small percentage of the overall insurance business of non-life insurers and an insignificant proportion of the life insurers.-[18]
(These numbers do not include persons covered under health insurance schemes in the unorganized sector, namely NGO’s operating their own health insurance schemes, health coverage provided by central and state governments to their employees and cancer insurance schemes run by some cancer hospitals, self-insured employers, etc.)-[18]
Virtually all health insurance products in the Indian insurance market are designed to meet the hospitalization expenses of the policyholder. This has not changed significantly since the introduction of health insurance in 1986. Health insurance policies do not cover dental services, vision services, preventive care, home health services or long-term care and, rarely, out-patient services. In many cases policies exclude certain kinds of care, even if a hospitalization occurs.-[18]
In addition to basic hospitalization, the health insurance market has witnessed the introduction of hospital cash (cash payments to the individual if they are hospitalized) and critical illness products, which cover a list of designated diseases. Additionally, some newly developed surgical procedures which do not require hospitalization, such as lithotripsy and laparoscopy, are now accepted by insurers for reimbursements under the hospitalization policies.-[18]
Some insurers have recently introduced what are called Hospital Cash Policies. These policies, which are in fact supplemental income insurance, provide for a daily allowance during the days of hospitalization. Their purpose is to help policyholders to meet-out-of pocket expenses that are not covered under a hospitalization policy. ICICI Lombard and Cholamandalam are pioneers in this approach. To date they have not been popular with the general public since the per diem amounts that they pay are small but as indicated above they may be very important for low income populations. - [18]
There has been a spurt in bank assurance tie-ups and banks such as ICICI are aggressively promoting tailor-made health insurance policies to their clients under a group policy or as a retail product. In some cases, banks also own insurance companies whose products they may distribute. Similarly, credit card companies have partnered with insurers to provide health and personal accident coverage to their subscribers. Notable examples among them include Citibank and HDFC Bank.-[18]
Group health premium increased between 10-50% following de-tarifficiation in 2007.
Insurance as a tax efficient savings Instrument under Section 80D.
To encourage health insurance, the Government has allowed Income Tax benefit up to Rs 15,000 paid as premium. However, for senior citizens, the Income Tax benefit is higher at Rs 20,000 paid as premium. Additional deduction of Rs 15000 is available to an individual paying medical insurance premium for his/her
Role of TPA’s
TPA: (Third Party Administrators) - was introduced through the notification on TPA Health service regulations, 2001 by IRDA, with a basic role as an intermediary between the insurer, the insured, and facilitate higher efficiency, standardization, provide cashless healthcare services to policyholders and increase penetration of health insurance in the country.-[16] -[15]
Much of the actual administrative work is being done by the TPA but at a fixed rate varying regionally from 5.2 or 5.4 percent by public insurers and from 7 to 10 percent by private insurers. TPAs have become their “back office”, handling enrollment, pre-authorization, utilization review, claims processing/denial, etc.-[18]
TPA have a wider role to play in standardization of charges and managing cash-less services in health insurance, TPA’s earn major revenue from fee charged as commission on insurance premium and the sources of potential revenue are from benefit management, medical management, provider network management, claim administration and data management.-[15]
The introduction of TPAs as intermediaries in the healthcare service chain was done with a view to ensure higher efficiency, standardization, providing cashless healthcare services to policyholders and increasing penetration of health insurance in the country.-[16]
India, could not totally escape the tide of the financial crisis largely influenced by the sub-prime crisis which started in the United States in late 2007. However, due to its higher levels of income growth during the past five years as also because of prudent financial management underpinned by sound and solid banking system supporting the payment and settlement procedures, India had limited the contagion effect. Never-the-less the stock values declined sharply effecting capital availability. India also had to loose some of its policies and adopted both conventional and unconventional methods to contain the contagion effect. The Indian economy which had grown at an average of 8.8 per cent before 2008-09 could grow only at 6.7 per cent.
In this background the sudden surge of health insurance with a 60 per cent growth is phenomenal. Besides, health insurance portfolio is itself new to the Indian domain and thus the growth is additionally significant.
Observation
Health insurance data is not readily available in India and that can pose a challenge.
Incidence data is only available from government sources and it is skewed towards infectious disease on which some mandatory reporting requirements exist. Healthcare cost data is not available in a well structured manner. Published data has to be supplemented by interaction with industry professionals.
Health insurance in India has been historically bought and not sold. To attract a wider clientele a new insurer will need to build confidence and educate customers. Nevertheless, customer awareness about health insurance is increasing. The income demographics, urbanization, awareness about healthcare needs, increased availability of high quality healthcare and associated costs, health cover as a supplementary benefit by employers are some of the issues propelling the 30% growth in health insurance. Increasingly a larger percentage of the population has the financial resources to purchase health insurance. Since health was a very small part of the portfolio for most general insurers they did not pay much attention to it. With the changing time it is now approximately 13% of total premium for general insurers and for some insurers almost 20%, so they are paying more attention to it. Over the last few months, premiums have increased. The increase has been higher in the retail business than in the group business. Group premiums have also increased due to de-tariffing of other general lines and independent pricing of health policies. Group premiums will rise as more de-linking from other corporate business lines takes place.
The health insurance industry is in an upward trend. The service level expectations of the Indian consumer are rising and they are becoming brand conscious. The Indian consumer demands a “value for money”
印度衛生行業的關鍵部門主要包括醫院，診斷，制藥，醫療旅游，醫療設備，臨床研究，生物技術和醫療資訊。醫療保險也直接或間接地影響了印度衛生部門的發展。
十年間，印度的私人衛生部門已經得到了顯著成長（1999巴魯）。印度的醫療保健給藥系統是由超過80％的私營部門和不足20％的公共部門共同統治的。在印度，獨立的私營部門僅有8％的醫療設施（世界銀行2004），但最近的估計表明，所有的醫院，擁有64％的病床，85％的醫生，80％的門診病人和57％的住院病人，93％集中在私營機構（世界銀行，2001）。
對優質醫療保健的需求也增加了更愿意使用私營醫療設施的患者。印度的經濟繁榮推動了城市化進程，創造一個不斷擴大的中產階級群體，更多的可支配收入花在醫療保健方面，更多的婦女進入勞動力市場，進一步提升了印度家庭的購買力。
Overview Of Indian Health Industry Economics Essay
The Key sectors being Hospitals, Diagnostics, Pharmaceuticals, Medical Tourism, Medical Equipment, Clinical Research, Biotechnology & Medical IT. Medical Insurance has directly and indirectly contributed to the growth.
Over the years the private health sector in India has grown remarkably (Baru 1999).Healthcare delivery system in India is dominated by private sector comprising of more than 80% and Public sector less than 20%. At independence the private sector in India had only eight percent of health care facilities (World Bank 2004) but recent estimates indicate that 93% of all hospitals, 64% of beds, 85% of doctors, 80% of outpatients and 57% of inpatients are in the private sector (World Bank 2001).
The demand for quality healthcare has increased with patients preferring to use private healthcare facilities. India’s thriving economy is driving urbanization and creating an expanding middle class, with more disposable income to spend on healthcare. More women are entering the workforce as well, further boosting the purchasing power of Indian households. Between 1991 and 2001, the percentage of women increased from 22% to 26% of the workforce, according to the Indian government census. [1-H] In the period 1993-94 to 2001-2002, aggregate household expenditure on health services has increased at an annual rate of 9.3 percent. - [6-H] Over 150 million Indians have annual incomes of more than US$ 1,000, and many who work in the business services sector earn as much as US$ 20,000 a year. If the economy continues to grow at the current rate and the literacy rate keeps rising, much of western and southern India will be middle class by 2020 says a CII study.
An important driving growth factor in the healthcare sector is India’s booming population, increasing at a 2% annual rate. By 2030, India is expected to surpass China as the world’s most populous nation. By 2050, the population is projected to reach 1.6 billion.[1-H]
Life expectancy, which averaged 63.3 years in 2000-04, is expected to increase to 66 years in 2010. The proportion of the population aged 65 years and over is also on the rise, and has increased from 4.7 per cent in 2000 to 5.3 per cent in 2005 and 5.8 per cent in 2010. Although the rate of ageing in India is slower than the developed world, the large population makes any increase significant in terms of absolute numbers, and therefore also in terms of market potential.-[10-H]
The Indian economy, estimated at roughly $1 trillion, and is growing in tandem with the population. Goldman Sachs predicts that the Indian economy will Expand by at least 5% annually for the next 45 years (see chart), and that it will be the only emerging economy to maintain such a robust pace of growth -[1-H]
A survey by NCAER, an independent economics research agency, suggests that per capita expenditures on healthcare rise with higher education levels. Households that have higher education levels tend to spend more per illness than households with lower education levels. Rising literacy in India is improving health awareness.-[10-H]
Change of disease pattern from chronic diseases to lifestyle diseases. Studies also indicate that lifestyle-related diseases such as high blood pressure, heart disease, cancer and diabetes, obesity, psychiatric disorders are fast becoming common, not only among the 300 million or more emerging Indian upper middle and the upper classes, but also among the rural class, thus India is not only undergoing major economic transformation, but also undergoing epidemiologic transition.
Increasing private sector participation in healthcare services is stimulating change in the Indian healthcare industry due the government FDI policy i.e. 100% FDI is permitted for all health-related services under the automatic route, Income tax exemption for 5 years to hospitals in rural areas, Tier II and Tier III cities, Lower tariffs and higher depreciation on medical equipment.
Introduction INSURANCE SECTOR
The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life insurance business, the Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance that provided strict state control over the insurance business, from 1946 onward after Indian independence the insurance sector was completely dominated by Indian players.-[5]
It was perceived that the private companies would not promote insurance in rural areas and the government would be in a better position to channel resources for saving and investment by taking over the business of life insurance. This led the government to nationalize all the private life insurance’s (154 Indian insurance companies, 16 non-Indian companies, and 75 provident societies) on January 1956 the wholly state owned Life Insurance Corporation of India was established and granted a monopoly. - [5]
The non-life (general) insurance was not nationalized until 1973 as this was urban-centric catering mainly to the needs of organized trade and industry, a government company known as General Insurance Corporation of India (GIC) was formed by the central government thereby 107 Indian and foreign insurers operating in the country were grouped into four operating companies namely 1) National insurance co. Ltd, 2) The New India Assurance co. Ltd, 3) Oriental Insurance company Ltd, 4) United India Insurance company Ltd, all the four subsidiaries of GIC compete with each other. But they failed to provide better service, products and also were not able to reach the vast majority of people in the rural areas, because of a highly bureaucratic, corrupt, inefficient administration and mismanagement of investable funds.-[5]
By 1991 the entire Indian economy was going for Liberalisation, Privatisation, and Globalisation (LPG). Slowly various sectors got privatized to promote healthy competition for the benefit of Indian customers, but only after almost eight years was the insurance sector in India privatized in 1999-[5] As the government wanted to proceed with caution it decided to set up a committee headed by Mr. R.N. Malhotra (the then-governor of the RBI) in April 1993 which recommended in its report released in January 1994 that the market should be opened to private-sector and ultimately foreign private- sector. - [5]
On December 7, 1999, the government passed the Insurance Regulatory and Development Authority (IRDA) Act, repealing the monopoly conferred to the LIC in 1956 and to the General Insurance Corporation in 1972.-[5]
In less than six years time (2000-06), 15 life insurance and 09 non-life insurance players entered the Indian market. The impact of privatizing the Indian insurance sector brought
Market Expansion
New Product Offerings
Improved Customer Services
New Channels of Distribution
Many of the major global insurance companies have entered the Indian life insurance market through joint ventures with Indian companies. These include AIG, New York Life, Allianz, Prudential, Standard Life, Sun Life Canada, ING, MetLife, Cardiff and Old Mutual. This has rejuvenated the erstwhile monopoly player LIC, which has responded to the competition in an admirable fashion by launching new products and improving service standards.-[5]
Health Insurance
IRDA defines health insurance as: the effecting of contracts which provide sickness benefits or medical, surgical or hospital expense benefits, whether in-patient or out-patient, on an indemnity, reimbursement, service, prepaid, hospital or other plans, including assured and long term care.-[18]
Health insurance in a narrow sense would be ‘an individual or group purchasing health care coverage in advance by paying a fee called premium.’ In its broader sense, it would be any arrangement that helps to defer, delay, reduce or altogether avoid payment for health care incurred by individuals and households.
Premiums for health insurance in India are determined only by two factors: the age of the insured and the amount of insurance chosen. Unlike life insurance, there is no differential rating between sexes in India. Under most health insurance policies, entry age for coverage ranges from 3 years to 55 years, although some insurers cover a new-born child provided that the parents are simultaneously covered. Coverage is extended to 85 years if it is continuous and the claims ratio is deemed acceptable by the insurance company (in effect negating any guaranteed renewability of policies for those over 85).-[18]
In the public sector, Of the various schemes offered, Mediclaim is the main product of the GIC. The Medical Insurance Scheme or Mediclaim was introduced in November 1986 and it covers individuals and groups with persons aged 5 – 80 yrs. Children (3 months – 5 yrs) are covered with their parents. This scheme provides for reimbursement of medical expenses (now offers cashless scheme) by an individual towards hospitalization and domiciliary hospitalization as per the sum insured.-[2]
On December 7, 1999, the government passed the Insurance Regulatory and Development Authority (IRDA) Act. The authority created by the Act is now called IRDA. It has 10 members. New licenses are given to private companies. IRDA has separated the life, non-life, and re-insurance businesses; a company has to have separate licenses for each line of business. Each license has its own capital requirements (around $24 million for life or non-life and $48 million for re-insurance). - [5]
Players in the industry
Health insurance accounts for approximately 13% of general insurance industry’s aggregate portfolio. Approximately 60% of the health insurance market share is with 4 public sector non-life insurers, while private sector insurers account for 40% of the market share. – [19]
There are three types of insurers that offer health related products:
General Insurance (P&C) companies:
Public Sector – 4 players:
The General Insurance Corporation (GIC) and its four subsidiary companies (National Insurance Corporation, New India Assurance Company, Oriental Insurance Company and United Insurance Company) and the LIC of India provide voluntary insurance schemes.
Private Sector - 8 players.
In private insurance, buyers are willing to pay premium to an insurance company that pools people with similar risks and insures them for health expenses. The key distinction is that the premiums are set at a level, which provides a profit to third party and provider institutions. Premiums are based on an assessment of the risk status of the consumer (or of the group of employees) and the level of benefits provided, rather than as a proportion of the consumer’s income.
Life Insurance Companies:
There are 18 private sector life insurers, plus public insurer LIC.
Life insurance offer some health benefits as riders to core life policies, but there is an
Increasing trend towards substantial health riders and stand alone health products.
Stand Alone Health Insurance companies:
Star Health and Allied insurance Co.Ltd commenced operations in May 2006.
and Apollo DKV Health insurance Co Ltd commenced operations in February 2008 are registered exclusively to underwrite health, personal accident and travel insurance segment has continued to grow and expand its business significantly. Bupa Max the third entrant in the industry as a standalone Insurance company is awaiting registration from the IRDA
Write about the Government policy to include PVT players in the FDI scheme
The insurance industry in India is well organized to make sure that its interests are represented. IRDA, as the insurance regulator, forms the nodal point for insurers to influence government policy. Insurers individually or through their associations, the Life Insurance and General Insurance Councils, approach the regulator for discussions on issues that impact the insurance industry. (18]
Major national Trade associations like Federation of Indian Chambers of Commerce and Industry (FICCI), Confederation of Indian Industry (CII) and Associated Chambers of Commerce (ASSOCHAM) have championed the cause of health insurance and have partnered with the insurance industry as well as the provider community to influence health policy reforms.-[1
Health Insurance ( Trends & Progress)
Health insurance has experienced dramatic growth over the past two decades. The number of persons covered has increased annually by over 25 per cent from 1991-92 to 2005-06. The premiums have increased annually by 35 per cent during the same period. While this growth is impressive, the base was exceedingly small and the industry still insures only a small portion of the Indian population.-[18]
During 2005-06 the non-life health insurance companies collected premiums of Rs 22.6 billion and covered an estimated 17 million persons. During the same period, life insurance companies covered around 66,000 lives under health riders and generated Rs 94 million as health insurance premium. This was a substantial change (at least in premium) since the premium collected by life companies from health riders increased from Rs 76 million in 2004-05 to Rs 94 million in 2005-06, an increase of nearly 30 per cent.-[18]
Although the number of persons covered has grown from 0.69 million in 1991-92 to 3.5 million in 1998-99 and around 17 million in 2005-06, it is still a very small percentage of the population, only 1.56 per cent in 2005-06. Despite the impressive growth of health insurance, it remains a small percentage of the overall insurance business of non-life insurers and an insignificant proportion of the life insurers.-[18]
(These numbers do not include persons covered under health insurance schemes in the unorganized sector, namely NGO’s operating their own health insurance schemes, health coverage provided by central and state governments to their employees and cancer insurance schemes run by some cancer hospitals, self-insured employers, etc.)-[18]
Virtually all health insurance products in the Indian insurance market are designed to meet the hospitalization expenses of the policyholder. This has not changed significantly since the introduction of health insurance in 1986. Health insurance policies do not cover dental services, vision services, preventive care, home health services or long-term care and, rarely, out-patient services. In many cases policies exclude certain kinds of care, even if a hospitalization occurs.-[18]
In addition to basic hospitalization, the health insurance market has witnessed the introduction of hospital cash (cash payments to the individual if they are hospitalized) and critical illness products, which cover a list of designated diseases. Additionally, some newly developed surgical procedures which do not require hospitalization, such as lithotripsy and laparoscopy, are now accepted by insurers for reimbursements under the hospitalization policies.-[18]
Some insurers have recently introduced what are called Hospital Cash Policies. These policies, which are in fact supplemental income insurance, provide for a daily allowance during the days of hospitalization. Their purpose is to help policyholders to meet-out-of pocket expenses that are not covered under a hospitalization policy. ICICI Lombard and Cholamandalam are pioneers in this approach. To date they have not been popular with the general public since the per diem amounts that they pay are small but as indicated above they may be very important for low income populations. - [18]
There has been a spurt in bank assurance tie-ups and banks such as ICICI are aggressively promoting tailor-made health insurance policies to their clients under a group policy or as a retail product. In some cases, banks also own insurance companies whose products they may distribute. Similarly, credit card companies have partnered with insurers to provide health and personal accident coverage to their subscribers. Notable examples among them include Citibank and HDFC Bank.-[18]
Group health premium increased between 10-50% following de-tarifficiation in 2007.
Insurance as a tax efficient savings Instrument under Section 80D.
To encourage health insurance, the Government has allowed Income Tax benefit up to Rs 15,000 paid as premium. However, for senior citizens, the Income Tax benefit is higher at Rs 20,000 paid as premium. Additional deduction of Rs 15000 is available to an individual paying medical insurance premium for his/her
Role of TPA’s
TPA: (Third Party Administrators) - was introduced through the notification on TPA Health service regulations, 2001 by IRDA, with a basic role as an intermediary between the insurer, the insured, and facilitate higher efficiency, standardization, provide cashless healthcare services to policyholders and increase penetration of health insurance in the country.-[16] -[15]
Much of the actual administrative work is being done by the TPA but at a fixed rate varying regionally from 5.2 or 5.4 percent by public insurers and from 7 to 10 percent by private insurers. TPAs have become their “back office”, handling enrollment, pre-authorization, utilization review, claims processing/denial, etc.-[18]
TPA have a wider role to play in standardization of charges and managing cash-less services in health insurance, TPA’s earn major revenue from fee charged as commission on insurance premium and the sources of potential revenue are from benefit management, medical management, provider network management, claim administration and data management.-[15]
The introduction of TPAs as intermediaries in the healthcare service chain was done with a view to ensure higher efficiency, standardization, providing cashless healthcare services to policyholders and increasing penetration of health insurance in the country.-[16]
India, could not totally escape the tide of the financial crisis largely influenced by the sub-prime crisis which started in the United States in late 2007. However, due to its higher levels of income growth during the past five years as also because of prudent financial management underpinned by sound and solid banking system supporting the payment and settlement procedures, India had limited the contagion effect. Never-the-less the stock values declined sharply effecting capital availability. India also had to loose some of its policies and adopted both conventional and unconventional methods to contain the contagion effect. The Indian economy which had grown at an average of 8.8 per cent before 2008-09 could grow only at 6.7 per cent.
In this background the sudden surge of health insurance with a 60 per cent growth is phenomenal. Besides, health insurance portfolio is itself new to the Indian domain and thus the growth is additionally significant.
Observation
Health insurance data is not readily available in India and that can pose a challenge.
Incidence data is only available from government sources and it is skewed towards infectious disease on which some mandatory reporting requirements exist. Healthcare cost data is not available in a well structured manner. Published data has to be supplemented by interaction with industry professionals.
Health insurance in India has been historically bought and not sold. To attract a wider clientele a new insurer will need to build confidence and educate customers. Nevertheless, customer awareness about health insurance is increasing. The income demographics, urbanization, awareness about healthcare needs, increased availability of high quality healthcare and associated costs, health cover as a supplementary benefit by employers are some of the issues propelling the 30% growth in health insurance. Increasingly a larger percentage of the population has the financial resources to purchase health insurance. Since health was a very small part of the portfolio for most general insurers they did not pay much attention to it. With the changing time it is now approximately 13% of total premium for general insurers and for some insurers almost 20%, so they are paying more attention to it. Over the last few months, premiums have increased. The increase has been higher in the retail business than in the group business. Group premiums have also increased due to de-tariffing of other general lines and independent pricing of health policies. Group premiums will rise as more de-linking from other corporate business lines takes place.
The health insurance industry is in an upward trend. The service level expectations of the Indian consumer are rising and they are becoming brand conscious. The Indian consumer demands a “value for money”
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